Qantas Frequent Flyers to Earn Points Based on Ticket Price, No Longer Miles Flown

Qantas is cutting more corners, and this time those who would be hit by the embattled air carrier's axe are its passengers who belong to the Frequent Flyers Club.

The changes, announced on Thursday night, are part of Qantas's $2-billion cost-cutting programme spread over three years that would include 5,000 employees who would lose their jobs as well as 26 managers.

Qantas said the changes aim to align the number of points it 9 million Frequent Flyers Club members earn closer with how much fare they paid rather than the miles they have flown. The move is to ensure that travelers who have discounted fare would earn lesser points.

That would translate into the points being halved in some routes like the Australia to London leg where passengers with discounted economy tickets, including sale tickets, would get only 6,200 points versus 12,400 points for those with the pricier flexi-saver ticket.

Also, minimum points guarantee for those on economy and discount economy fares are down to 800 from 1,000 points. It would apply to short-haul routes such as Sydney to Melbourne. But those with flexible economy tickets actually would get higher minimum points guarantee to 1,200 from 1,000, while those in business are also boosted to 1,400 from 1,250.

Qantas would also cut the number of status credits that passengers would earn with partner airlines, making it more difficult to reach Silver, Gold or Platinum level.

Michael McCarthy, chief market strategist of CMC Markets, said Qantas customers should brace for more cuts because of the financial pressure on the Flying Roo after it reported $252 million half year loss and as the airline seeks to build its margin.

However, the move could backfire as it could spur loyal customers to fly instead with rival Virgin Australia.